Is Refinancing Worth the Cost?

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Some have said that only when your new interest is at least 2 points under your current rate, should you refinance your loan. That might have been accurate a while back, but as refinancing has been costing less recently, it's never the wrong time to think about a new loan! A refinanced mortgage loan can be worth its cost many times over, factoring in the benefits that come, in addition to a reduced interest rate.


When you refinance, you may be able to lower the interest rate and mortgage payment , perhaps significantly. You also may be given the option of pulling out some of the equity in your house by "cashing out" a sum of money to fix up your home, consolidate debt, or plan a special vacation. With lower rates, you might also be able to build your home equity more quickly by moving to a shorter-term mortgage loan.

Fees and Expenses

Of course, you will have some fees and expenses during the the refinance process. You will be charged the same kinds of fees as you did with your existing home loan. Included in your costs can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Do the Math

Paying points can result in a lower interest rate. The money you will save over the life of the loan may be substantial if you've paid up front about 3% of the new loan balance. We recommend that you consult a tax professional before acting on rumors that the paid points can be deducted on your taxes.

An additional cost that a borrower may take into account is that a reduced rate of interest will reduce the interest amount you'll deduct on your taxes. Call us at (207) 571-8034 to help you do the math.

Most people find that the monthly savings outweigh the initial expenses of a refinance. We can help you explore your options, considering the effect a refinance may have on your taxes, how likely you may be to sell in the next couple of years, and your money on hand. Call us at (207) 571-8034 to get started.

Curious about refinancing your home? Call us: (207) 571-8034.